So, you’re looking to expand your business and open a mainland company in Dubai. Creation Business Consultants team of expert consultants can help you to form a company in Dubai in the UAE while making sure that you maintain control of your company.
Along with the company setup, we assist with:
Security documents that give you peace of mind you’ll receive 100% profits.
Have full control of your company.
You will make all operational and business decisions.
You will have all the company voting rights.
We have helped many business owners from the UK, USA, Europe, Australia, Asia, and many other countries to successfully set up their companies in Dubai and the UAE, fulfilling all their needs specific to their business requirements.
Once your mainland company is established you must ensure all shareholders, directors, the General Manager, and employees are aware of and abiding by UAE Commercial Companies Law and conforming to best business practices. Set out below are some of the main dos and don’ts that a mainland company should follow.
Mainland companies are those entities which are registered under the Federal Law No. 2 of 2015 Commercial Companies Law. Some of the basic characteristics of a mainland company are:
The establishment is registered by the Department of Economic Development of a particular Emirate.
A mainland professional license company must have a national service agent.
A company must have between one and five directors.
ARTICLE 9 OF THE FEDERAL LAW NO. 2 OF 2015 ON COMMERCIAL COMPANIES LAW PERMITS THE INCORPORATION OF THE FOLLOWING TYPES OF MAINLAND COMPANIES IN THE UAE:
Joint Liability Company – General Partnership Company
Simple Commandite Company – Simple Limited Liability Partnership Company
Limited Liability Company (LLC)
Public Joint Stock Company
Private Joint Stock Company
Further Article 9 of the Federal Law No. 2 of 2015 on Commercial Companies Law provides that if a company does not adopt any of the above-mentioned forms, it will be null and void. Therefore, it is vital that you seek the correct advice when setting up a Dubai company.
In addition to the above structures, foreign companies or entities registered in free zones can also set up a Dubai branchor a representative office within mainland UAE. However, the business activities of the branch must be identical to the business activities of the parent company.
THE IMPORTANT DOS
As per the aforementioned provisions, the following are some of the requirements for investors setting up business in Dubai mainland:
Discuss and negotiate the terms of the shareholder agreement.
The foreign shareholder must enter the UAE at least once at the time of the initial approval.
Ensure the company meets the minimum number of shareholders, directors, and manager.
The company’s total number of shareholders, directors or manager does not exceed the limit.
Keep formal accounting records as good business practice.
Schedule shareholder and board meetings periodically with detailed minutes.
Any changes in the shareholding, the MoA, and other company documents will require formal amendments.
The following are some of the main benefits of an onshore / mainland company:
No restrictions on doing business throughout the UAE and globally.
No foreign exchange control, quotas or trade barriers.
No currency restrictions.
Low import duty.
Liberty to drive the company from any part of UAE and freedom from heavy rents charged by offices in free zones.
No stipulation for yearly audits.
A wide range of license type and activities.
Only 9% corporate tax (starting 1 June 2023).
No personal tax.
100% repatriation of capital and profits.
No limitation in obtaining employee visas.
No limitations on recruitment.
Ability to get affordable space with flexible rent or lease for office anywhere in the UAE
Flexibility to perform business in any part of the UAE with local and UAE government authorities
The law does not permit the use of certain words within the trade name of a company. The company name should not include the name of a country, government or religious words etc. If your company name contains special features or certain words, this may incur additional government fees.
A company that is registered by the Department of Economic Development is only permitted to perform those activities which are stated in the company trade license. Any other additional activities outside of the scope of a company trade license and where the business wishes to perform should not be undertaken without prior permission from the Department of Economic Development.
A branch of a foreign company should not undertake any trading activities. The branch must operate as per the parent company business activities (approval from the Department of Economic Development and Ministry of Economy) will need to be granted in order for the branch to be able to legally operate.
A representative office can not undertake any trading or manufacturing activity. Representative offices are meant only to act as a marketing arm of the parent company i.e. it cannot invoice and sell from this entity.
A company that is established in mainland UAE is governed by UAE Commercial Companies Laws and therefore should not undertake any action against the public policy or morality of the state.
To conclude, setting up a company in mainland Dubai can be lucrative for business owners that want to target the UAE market for selling their products and services. Most importantly, for those that are starting a company in mainland Dubai or Abu Dhabi, the UAE Commercial Companies Law does not prescribe a minimum share capital. However, the company must have sufficient capital for its business purpose and shall be guaranteed by the partners. The UAE can provide a mainland company with access to other GCC and global markets that can make it even easier to conduct business. Mainland companies are often deemed to be more attractive when compared to free zone companies as there are fewer restrictions.
At Creation Business Consultants we will ensure your mainland company is established for success by ensuring your trade license has the maximum number of business activities. Periodically we will provide updates regarding commercial laws which may impact your mainland business operations within the UAE and wider-GCC, provide information regarding employment law changes which are applicable to your mainland industry sector and we will offer advice to mitigate risks for your mainland company and the nominated General Manager arising from any regulatory changes.
